Stuck in a By-Product Rut
A large snack food manufacturer with facilities across the United States generates hundreds of millions of pounds of snack waste every year. Revenue and service options for the by-product had not changed in years and the company was not getting much value for the by-product.
As time passed, the service providers had most of the negotiating leverage in providing equipment and contract terms. The company was looking to capture more value and better service for their factories while reducing the corporate and facility manpower to facilitate the offtake of material. Adding to the complexity of a solution, lower commodity markets and Industry consolidations were already leading to lower levels of value for the by-product.
Alongside our sister company, International Ingredients Corporation (IIC), our team of commercial managers and animal nutritionists audited each of the company’s manufacturing sites. We developed proprietary economic models of the nutritional features and market applications for the material. Our sales and marketing teams originated and developed relationships with new customers. These new customers were positioned to make capital investments to support the upcycling of the by-product and had the nutritional acumen to more fully understand the value of the material.
As a result, GFS and IIC created a new marketplace for this by-product material. We bypassed the traditional intermediaries and were able to achieve higher service levels and greater valuations for the by-product. This process generates millions of dollars of additional revenue each year for the company, while also providing better service and requiring less of their staff time.